Financial Assets Classification,Reporting Transparency And Earnings Management

"CAS22-Confirmation and Measurement of Financial Instruments" has a strong subjectivity for the classification criteria of trading financial assets and available-for-sale financial assets,and the classification of available-for-sale financial assets can provide profit manipulation space for enterprises.The reform of the financial statement report accounting standard in 2014,which required to change the disclosure of composition of other comprehensive income from notes to the income statement,thereby enhancing the transparency of the repoting of relevant information on available-for-sale financial assets.In the context of the above conditions,this article uses a sample of listed companies in China from 2012 to 2016 to construct a multiple regression model and empirically analyzes the relationship among the classification of financial assets,transparency of other comprehensive income,and earnings management.Research conclusions are as follows: First,the proportion of financial assets held by listed companies has a significantly positive effect on the trend of the distribution of available-for-sale financial assets.Second,companies with earnings management incentives are more inclined to sell available-for-sale financial assets.Third,the higher transparency of the presentation of other comprehensive income will reduce the management's preference for dividing financial assets into available-for-sale financial assets.At the same time,it will curb the tendency of companies with earnings management incentives to dispose of available-for-sale financial assets.The recommendations of this paper are as follows: Enterprises should effectively implement the classification criteria in the new financial instruments guidelines,which can greatly reduce the subjectivity of management;enterprises should also strictly follow the guidelines to report the income of other comprehensive constituent projects,so thatusers of accounting information can obtain changes of available-for-sale financial assets from the income statement;as information users should pay more emphasis on other comprehensive,and synthetically consider the earnings quality of enterprises.